The UK-based Green Finance Institute (GFI) announced today the launch of the Coalition for the Energy Efficiency of Buildings Europe (CEEB Europe), a new initiative aiming to mobilize funding to help decarbonize Europe’s buildings.
Buildings are a key source of global greenhouse gas (GHG) emissions, and also one of the hardest to replace, given their long-term nature. According to GFI, Europe’s building sector is responsible for 40% of energy consumption, more energy than any other sector, and account for 36% of the EU’s energy-related GHG emissions. 97% of Europe’s buildings will require some level of renovation before 2050.
To meet the EU’s 2030 climate target, €3.5 trillion of the total investment will be needed this decade to decarbonize Europe’s buildings through renovation, according to GFI. The investment gap to 2030 is estimated at €2.75 trillion, with public investment being unable to close this gap alone.
GFI’s new initiative will bring together leaders in the finance, real estate, and energy sectors, and across policy, academia, and non-profit organizations, in each country of operation co-develop the innovative financial products that will address this investment gap. GFI will partner with national finance and real estate organizations across Europe to form coalitions and collaborate with networks to create and scale markets for building renovation.
The new announcement follows the launch in July 2021 by the European Commission of a broad set of proposals aimed at driving the EU to its ambition to cut emissions by 55% by 2030, compared to 1990 levels. The roadmap includes a series of proposals for buildings, supporting last year’s Renovation Wave Strategy, which highlights the urgency with which the building stock must be renovated and upgraded. The EU aims to double the innovation rate by 2030. However, the additional investment needed to meet the 55% target is still €275 billion per year to 2030, the largest climate investment shortfall of any sector.
The GFI stated that the public capital made available during the current EU budget to 2027 creates an opportunity for a longer-term greener finance market to be built. With the right supporting mechanisms and financial products in place, grant and loan funding provided to the Member States can act as a catalyst for private finance to flow in.
Dr. Rhian-Mari Thomas OBE, Chief Executive, Green Finance Institute, said:
“While small compared to the scale of what is needed, Europe’s recovery budgets have the potential to kick-start the widescale greening of the building stock. However, to drive the necessary investment of over €3.5 trillion in renovation to 2030, a collective, outcomes-focused approach will be key. We’ve launched CEEB Europe to work in partnership with others to crowd-in private funding to this sector, by convening coalitions of property, finance, policy and supply chain experts to examine and develop the solutions to overcoming the barriers to investment.”
As a next step, CEEB Europe will partner with networks and players in the finance and real estate sectors of high-potential, high-ambition countries to join or set up in-country coalitions These coalitions will work through the country-specific challenges and opportunities for the widescale renovation of housing.
James Hooton, Programme Director, CEEB Europe, said:
“The public funding attached to Europe’s recovery plans can start the renovation wave, but it cannot sustain it. Therefore, these funds represent a key opportunity to develop innovative new policies and public finance solutions to crowd-in private capital. CEEB Europe exists to collaborate with actors in member state countries to unlock the financial, as well as data, regulatory and policy barriers to renovate their buildings, and to create new products and tools to accelerate private sector investment towards meeting the ambitions of the Renovation Wave. We want to partner with equally dynamic organisations in this space, to examine the challenges on a country-specific basis, and then design and bring to market the innovations to overcome them.”